The Real Deal New York

Is Manhattan’s townhouse tundra thawing?

Despite a tough 2017, several record-setting deals have boosted confidence for the year ahead
By E.B. Solomont | January 01, 2018 01:00PM

Keith Rubenstein’s mansion at 8 East 62nd Street

When billionaire Vincent Viola listed his 40-foot townhouse back in 2013, the CEO of Virtu Financial asked an eye-popping $114 million. Four years later, Viola inked a deal to sell the house for $80 million in what could still be a record breaker in the townhouse market.

The 20,000-square-foot property, at 12 East 69th Street, is the latest in a string of deals to suggest the townhouse market may not be as dead as everyone thinks. In April 2017, an entity affiliated with HNA Holdings CEO Roy Liao closed on the Wildenstein mansion for a record $79.5 million.

Manhattan’s townhouse market struggled in 2016, with 454 deals valued at $3.1 billion — down from 492 deals totaling $4.2 billion in 2015, according to data from the townhouse brokerage Leslie J. Garfield.

As of late December, 2017 wasn’t looking much better: There were only 100 contracts signed on Manhattan townhouses asking $4 million and up for the year — an 11 percent drop from 2016, according to Olshan Realty.

But brokers say they’re noticing a slight uptick in the market — even if it takes longer for deals to close. “For the first time in a while, I think we have five contracts out on the 60 or so townhouse we represent,” said Jed Garfield of Leslie J. Garfield. “That’s definitely a positive.”

Last year, even before Viola found a buyer for his house, there was a series of massive townhouse deals. Real estate bigwig Andrew Farkas led the way, selling his house at 12 East 73rd Street for $41 million in February, followed by the Wildenstein sale and then Chinese billionaire Huang Guangyu’s $41.5 million purchase of 7 East 76th Street, formerly owned by Japanese billionaire Bungo Shimada.

Buoyed by those deals, several sellers listed their own mansions (or mansions in the making). In the fall, developer Joseph Chetrit listed a trio of townhouses on East 76th Street asking $39 million, $44 million and $51 million each. The sprawling properties range from 13,000 to 15,000 square feet.

Douglas Elliman’s Richard Steinberg, who is marketing the townhouses, said the uniqueness and size of the properties justifies the prices. “This was ground-up construction, with the preservation of the outside facade,” he said.

Mark Chin, CEO of Keller Williams Tribeca, sees record-breaking deals in a different light. “I think this time next year, this will be looked at as one of the signs of excess that preceded the softening market of 2018,” he said. He added that President Trump’s tax plan has spooked buyers and sellers.

But Compass’ Alyssa Soto Brody said buyer confidence is up, thanks to record-setting deals in both the townhouse and condo markets. “There’s a trickle-down effect,” said Brody, who is marketing a newly constructed 11,000-square-foot mansion at 357 West 17th Street.

She also acknowledged that sellers have reduced prices to meet the market. Her listing —which comes with a Bentley — is asking $29.5 million, down from $37 million in November. Within days of discounting the price, Brody received four requests for private showings.

In December, real estate investor Keith Rubenstein, who listed his home at 8 East 62nd Street last year for $84.5 million, also lowered his price, to $79.5 million. And he swapped brokers, replacing Adam Modlin for a team led by Steinberg.

“We were reacting to the market,” said the Elliman broker, pointing out that there were no townhouse sales above $50 million in 2016. “The market was telling us the buyer wasn’t out there for $85 million.”

But beyond the East Side’s Gold Coast, deals in neighborhoods such as West Chelsea and Central Harlem are setting new price records. Rutenberg NYC’s Holly Brittain recently sold a six-story townhouse at 208 Lenox Avenue for $4.6 million, a new benchmark for Central Harlem. The house sat vacant for 30 years before Brittain and her husband bought it for $825,000 in 2010.

Several other houses in the area have cracked the $4 million market in the past 18 months or so — including Maya Angelou’s house on West 120th Street, which sold for just under $4.1 million. “Since the $4 million mark was broken, brokers are going for it left and right,” Brittain said.